Abstract: A new partnership audit regime gives the IRS the ability to impose tax assessments on partnerships under audit. Here, we discuss the options available to partnerships. Doing nothing or making an uninformed decision could cause the partnership to pay a higher than necessary tax assessment and/or cause the partnership and its partners to waste time and money on unnecessary compliance. As always, we strongly encourage our clients to consult with their trusted tax professionals before making these decisions.

For years ending after December 31, 2017, the Bipartisan Budget Act of 2015 (“BBA”) created a new Centralized Partnership Audit Regime (“CPAR”). These new rules are applicable to all entities treated as a partnership for federal tax purposes and for the first time, makes partnerships liable for U.S. federal income tax assessments.

Why are the new rules important?

Absent a timely election out by qualifying partnerships (discussed below), these rules fundamentally change how tax is assessed and collected upon a partnership audit. For starters, partnerships will be required to designate a partner (or other person) with a substantial presence in the U.S. to be the Partnership Representative (“P-REP”) who will have the sole and binding authority to act on behalf of the partnership with the IRS. The P-REP effectively replaces the Tax Matters Partner of the old TEFRA partnership audit rules that are repealed by the BBA.

The general/default rule will have partnerships paying a tax (“imputed underpayment”) using the highest Section 1 tax rate in effect (currently at 37% for 2018), ignoring (1) the nature of the adjustment(s) (for example, long-term capital gains that would otherwise be subject to a lower tax rate) and (2) the nature of the partners (for instance, a partner that is a tax exempt entity not subject to an income tax). Favorable adjustments that do not offset unfavorable adjustments will be a reduction to income in the adjustment year (usually the year that the audit closes). There are significant and tedious rules surrounding the grouping and netting of unfavorable and favorable adjustments, which are outside the scope of this summary.

There are many obvious inequities associated with the default rules of this new audit regime. For instance, if there has been a change in ownership, new partners could bear the economic burden for tax assessments relating to unfavorable adjustments (and/or benefit from favorable adjustments) relating to years when they were not partners. Fortunately, there are alternatives that can help alleviate some of these inherent inequities; though some of these options (which we will discuss shortly) will come with additional monetary cost and compliance. The P-REP will have many decisions to make, which at times may benefit some partners to the detriment of others.

While the focus of this memo is the effect that the new statute will have on the audit process, the new rules also affect the process for making adjustments to previously-filed partnership tax returns, which is outside the scope of this memo.

Election out for certain partnerships with 100 or fewer partners

Certain partnerships may be able to “elect out” of the new rules if the following eligibility requirements are met:

Fewer than 100 partners, meaning fewer than 100 K-1’s issued, or that have potential to be issued, e.g., a husband and wife joint K-1 counts as two and each S-corporation shareholder member counts as one.

Must have eligible partners, meaning all partners must be one of the following: individuals; C corporations (including RICs and REITs); certain foreign entities that would be treated as a C corporation, were they domestic; S corporations; or an estate of a deceased partner.

Partnerships with trusts, partnerships, or LLCs (including disregarded entities/single-member LLCs) are not eligible to elect out.

This election is made yearly on the partnership’s timely filed tax return and is binding to the partnership and all the partners unless the IRS determines that the election was invalid.

If such an election is made, the partnership and the partners will be subject to the pre-TEFRA rules causing audits to be performed at the individual partner level; therefore expanding the potential scope of the audit. It will also be possible to for multiple partners to be audited by different auditors; having the potential for the same partnership item to be audited by several auditors with no requirement that their results conform to one another. Accordingly, partnerships should carefully weigh the pros and cons before making this election.

Other options are available

If the partnership is unable to elect out or chooses not to, the partnership will need to consider the various options available to them throughout the audit process. There are several modifications that a partnership can request to reduce the assessment; the partnership will also have the ability to elect to push out the audit adjustments and not pay the tax. Time constraints exist with each option, so procrastination could be costly.

Modification of imputed underpayments

A partnership that has received a notice of proposed partnership adjustment (“NOPPA”) may request one or more modifications to the proposed imputed underpayment.

The proposed regulations list several types of modifications, which include (but are not limited to):

Amended returns by reviewed year partners. If one or more partners of the reviewed year return include their respective share of the NOPPA adjustment(s) on an amended return for such year (including any other affected intervening year(s), and pay all taxes due), then the imputed underpayment of the partnership shall be determined without regard to such adjustment(s).

Tax-exempt partners. If the partnership demonstrates that a portion of the adjustment(s) is allocable to a reviewed year partner that would owe no tax by reason of its status as a tax-exempt entity, then the imputed underpayment will be determined without regard to such adjustment(s).

Modification based on a rate of tax lower than the highest applicable tax rate. A modification based on a lower rate of tax may be requested with respect to a reviewed year partner that is a C corporation and adjustments with respect to capital gains or qualified dividends that are attributable to reviewed year partners that are individuals.

Other modifications. Modifications that are not specifically described by the regulations may be requested and allowed if the IRS determines that such modifications are accurate and appropriate.

Alternative to payment of imputed underpayment by partnership (“push-out election”)

The partnership can also make an election (commonly referred to as the “push-out election”) and not pay the imputed underpayment. If elected, the partnership is not required to pay the imputed underpayment but is instead required to furnish statements to the reviewed year partners, who must then take into account their share of the partnership adjustments (both favorable and unfavorable), and calculate and pay their respective tax, penalties and interest (for the reviewed year and any affected intervening year). Refunds will not be issued for any year that the tax is lower as a result of such adjustments.

This election comes at the price of cumbersome compliance at both the partnership and partner level, and will be further complicated when tiered structures are involved. Furthermore, partners will also be subject to an additional 2% interest charge above the normal underpayment rate.

Now what?

While the IRS is still in the process of issuing and finalizing regulations for this regime, and the state response/impact is still unknown, the federal statute is in place and is not expected to be postponed. Therefore, it is still strongly recommended that partnerships should ready themselves now and start the process of amending their operating agreements to take into consideration such things like:

Identifying the P-REP

Limiting the P-REP’s liability and exposure for litigation from disgruntled partners

Outline required communications between the P-REP and the partners during an audit. Regardless of such terms being included in an operating agreement, the actions of the P-REP will be completely binding on the partnership and its partners

If it is the partnership’s intention to elect out of the CPAR, there should be clauses eliminating a partner’s ability to transfer their interests to an ineligible partner (such as a trust or single-member LLC)

For the benefit of Raich Ende Malter clients, we have distilled the tax changes affecting individuals in the H.R. 1 tax bill into a comprehensive, accurate list. The information contained in this list is culled from several reliable sources. We believe these points are the changes most likely to affect you:

Lower income tax rates and brackets.

The standard deduction is increased to $24,000 for married individuals filing a joint return, $18,000 for head-of-household filers, and $12,000 for all other taxpayers, adjusted for inflation in tax years beginning after 2018.

The deduction for personal exemptions is effectively suspended by reducing the exemption amount to zero.

Child tax credit increased to $2,000 per qualifying child. The credit phases out at $400,000 for married taxpayers filing jointly and $200,000 for all other taxpayers. Certain non-child dependents will have a nonrefundable $500 credit. Refundable credit amount increases to $1,400 per qualifying child up to the base amount of $2,000. Earned income threshold for the refundable portion of the credit will be reduced from $3,000 to $2,500.

“Kiddie tax” law: Taxable income of a child attributable to earned income is taxed under the rates for single individuals, and taxable income of a child attributable to net unearned income is taxed according to the brackets applicable to trusts and estates. This rule applies to the child’s ordinary income and his or her income taxed at preferential rates. (Note: kiddie tax applies to a child if 1) the child either has not attained age 19 by the end of the tax year or is a full-time student under the age of 24, and either parent is alive; 2) the child’s unearned income exceeds $2,100 for 2018; and 3) the child does not file a joint return.)

Breakpoints for capital gains taxes remain the same, but will be indexed for inflation using the Chained Consumer Price Index for All Urban Consumers (C-CPI-U).

Gambling losses: All deductions for expenses incurred in carrying out wagering transactions (in addition to gambling losses) are limited to the extent of gambling winnings.

SALT deductions: For tax years beginning after December 31, 2017 and before January 1, 2026, subject to the exception described below, state, local, and foreign property taxes, and state and local sales taxes, are deductible only when paid or accrued in carrying on a trade or business or an activity for the production of income. State and local income, war profits, and excess profits are not allowable as a deduction.

A taxpayer may claim an itemized deduction of up to $10,000 ($5,000 for a married taxpayer filing a separate return) for the aggregate of 1) state and local property taxes not paid or accrued in carrying on a trade or business or activity and 2) state and local income, war profits, and excess profits taxes (or sales taxes in lieu of income, etc. taxes) paid or accrued in the tax year. Foreign real property taxes may not be deducted.

For tax years beginning after December 31, 2016, in the case of an amount paid in a tax year beginning before January 1, 2018 with respect to a state or local income tax imposed for a tax year beginning after December 31, 2017, the payment will be treated as paid on the last day of the tax year for which such tax is so imposed. Therefore, a taxpayer who, in 2017, pays an income tax that is imposed for a tax year after 2017, can’t claim an itemized deduction in 2017 for that prepaid income tax.

Mortgage and home equity: For tax years beginning after December 31, 2017 and before January 1, 2026, the deduction for interest on home equity indebtedness is suspended, and the deduction for mortgage interest is limited to underlying indebtedness of up to $750,000 ($375,000 for married taxpayers filing separately).

“Binding contract” exception: A taxpayer who has entered into a binding written contract before December 15, 2017 to close on the purchase of a principal residence before January 1, 2018, and who purchases such residence before April 1, 2018, shall be considered to incur acquisition indebtedness prior to December 15, 2017.

Refinancing: The $1 million/$500,000 limitations continue to apply to taxpayers who refinance existing qualified residence indebtedness that was incurred before December 15, 2017, so long as the indebtedness resulting from the refinancing doesn’t exceed the amount of the refinanced indebtedness.

Medical expense deductions: For tax years beginning after December 31, 2016 and ending before January 1, 2019, the threshold on medical expense deductions is reduced to 7.5% for all taxpayers. The rule limiting the medical expense deduction for AMT purposes to 10% of AGI doesn’t apply to tax years beginning after December 31, 2016 and ending before January 1, 2019.

Charitable contribution deduction limit increased: For contributions made in tax years beginning after December 31, 2017 and before January 1, 2026, the limitation for cash contributions to public charities and private foundations is increased to 60% of AGI. Contributions exceeding the 60% limit are generally allowed to be carried forward and deducted for up to five years, subject to the later year’s ceiling.

Casualty losses: Under the Act, taxpayers can take a deduction for casualty losses only if the loss is attributable to a declared disaster.

Alimony treatment: For any divorce or separation agreement executed after December 31, 2018, or executed before that date but modified after it (if the modification expressly provides that the new amendments apply), alimony and separate maintenance payments are not deductible by the payor spouse and are not included in the income of the payee spouse. Instead, income used for alimony is taxed at the rates applicable to the payor spouse.

Miscellaneous itemized deductions: For tax years beginning after December 31, 2017 and before Jan. 1, 2026, the deduction for miscellaneous itemized deductions that are subject to the 2% floor is suspended.

“Pease” limitation on itemized deductions is suspended.

Repeal of ACA mandate: For months beginning after December 31, 2018, the amount of the individual shared responsibility payment is reduced to zero. This repeal is permanent.

Alternative minimum tax (AMT): For tax years beginning after December 31, 2017 and before Jan. 1, 2026, the Act increases the AMT exemption amounts for individuals as follows:

For joint returns and surviving spouses, $109,400.

For single taxpayers, $70,300.

For marrieds filing separately, $54,700.

Under the Act, the above exemption amounts are reduced (not below zero) to an amount equal to 25% of the amount by which the income of the AMT taxpayer exceeds the phase-out amounts, increased as follows:

For joint returns and surviving spouses, $1 million.

For all other taxpayers (other than estates and trusts), $500,000.

For trusts and estates, the base figure of $22,500 and phase-out amount of $75,000 remain unchanged. All of these amounts will be adjusted for inflation after 2018 under the new Chained Consumer Price Index for All Urban Consumers (C-CPI-U) inflation measure.

ABLE account changes: Effective for tax years beginning after the enactment date and before January 1, 2026, the contribution limitation to ABLE accounts with respect to contributions made by the designated beneficiary is increased, and other changes are in effect as described below. After the overall limitation on contributions is reached (i.e., the annual gift tax exemption amount; for 2018, $15,000), an ABLE account’s designated beneficiary can contribute an additional amount, up to the lesser of 1) the Federal poverty line for a one-person household; or 2) the individual’s compensation for the tax year.

Expanded use of 529 accounts: For distributions after December 31, 2017, “qualified higher education expenses” include tuition at an elementary or secondary public, private, or religious school, up to a $10,000 limit per tax year.

Discharged student loan debts for reasons of death or permanent disability will be excluded from gross income.

Recharacterization of IRA contributions: For tax years beginning after December 31, 2017, the rule that allows a contribution to one type of IRA to be recharacterized as a contribution to the other type of IRA does not apply to a conversion contribution to a Roth IRA. Thus, recharacterization cannot be used to unwind a Roth conversion

·Rollover period extended for rollover of plan loan offset amounts. For plan loan offset amounts which are treated as distributed in tax years beginning after December 31, 2017, the period during which a qualified plan loan offset amount can be contributed to an eligible retirement plan as a rollover contribution will be extended to the due date (including extensions) for filing the Federal income tax return for the tax year in which the plan loan offset occurs (the tax year in which the amount is treated as distributed from the plan).

Self-created property: Certain self-created property will no longer be treated as a capital asset. Effective for dispositions after December 31, 2017, the Act excludes patents, inventions, models or designs (whether or not patented), and secret formulas or processes, which are held either by the taxpayer who created the property or by a taxpayer with a substituted or transferred basis from the taxpayer who created the property (or for whom the property was created), from the definition of a “capital asset.”

Estate and gift tax: Increased exemption amount. For estates of decedents dying and gifts made after December 31, 2017 and before January 1, 2026, the Act doubles the base estate and gift tax exemption amount from $5 million to $10 million. The $10 million amount is indexed for inflation occurring after 2011 and is expected to be approximately $11.2 million in 2018 ($22.4 million per married couple).

Further changes to the tax bill are possible, but unlikely. If you have questions about how these points will affect you, please contact your trusted REM tax professional.

The proposed Tax Cuts and Jobs Act passed in the Senate by the narrowest margin on Friday. If passed and signed into law, it will create sweeping changes to the tax code. Along with a lower corporate tax rate, the bill makes significant tax changes for individuals. Here are some items which may affect you:

It’s still a work-in-progress. There are still significant differences between the House and Senate versions of the bill. This will require reconciliation, and there is potential for many changes before the bill moves on to the White House for signature. Therefore, all of the following is subject to change.

The standard deduction will nearly double—but the bill also eliminates the personal exemption, which could offset the higher deduction, particularly in the case of families with many dependents.

Deductions for state and local income taxes (SALT) will be eliminated. Property taxes will still be deductible ($10,000) for taxpayers who itemize.

Threshold for estate tax will double, making it applicable to even fewer individuals and couples.

The individual healthcare mandate would be eliminated in order to help pay for some of the other tax cuts.

There will be a new deduction for certain pass-through income of 23%.

The alternative minimum tax will remain, both for corporations and for individuals.

Everyone’s tax situation is different. We are closely following the bill as it is refined by Congress, and will send updates on major changes. In the meantime, should you have any questions, please contact your trusted REM advisor.

Prominent New York metropolitan area accounting and consulting firm Raich Ende Malter & Co. LLP (REM) is pleased to announce the expansion of its tax advisory and wealth preservation practices with the addition of two new tax principals.

Johnpaul Crocenzi, CPA

Melissa Abbott, CPA, JD

Johnpaul Crocenzi, CPA joined the firm this week as a principal specializing in high net worth individuals and their businesses. With nearly 20 years of experience in tax-saving strategies and planning, Mr. Crocenzi advises clients on complex tax matters, estate planning, business succession planning, and transaction structuring.

The firm promoted Melissa Abbott, CPA, JD from senior manager to principal. Ms. Abbott specializes in tax compliance and planning for trusts, estates, and private foundations. She performs detailed research and analysis of complex tax issues for her high net worth clients, concentrating on fiduciary income and estate tax.

“High net worth individuals and their families, their businesses, and the private foundations they support comprise a large percentage of Raich Ende Malter’s client base,” confirms Ellis Ende, Managing Partner. “We are enormously pleased to have Mr. Crocenzi and Ms. Abbott on board as key members of our ever-growing tax advisory and wealth preservation team.”

Prominent New York metropolitan area accounting and consulting firm Raich Ende Malter & Co. LLP (REM) is pleased to announce that Yasmine L. Misuraca, CPA, CFE has joined the firm as the Partner-in-Charge of its Forensic and Dispute Advisory practice. Ms. Misuraca has over 20 years of public and industry accounting experience and specializes in forensic accounting. Ms. Misuraca’s track record includes testifying on a large, high-profile case for the U.S. Securities and Exchange Commission, as well as working as a consultant for major law firms and privately-held companies. She will be located in the firm’s headquarters in New York City.

“Ms. Misuraca will focus on the growth of our firm’s forensic accounting practice,” REM’s Managing Partner Ellis Ende said. “Calculating and analyzing economic damages, conducting fraud investigations and forensic examinations, and analyzing financial issues as part of case strategy are what many attorneys, government agencies, and private clientele need from accountants. We are thrilled to have Ms. Misuraca on board at Raich Ende, and look forward to leveraging her expertise in this practice area.”

“I’m excited to lead the Forensic and Dispute Advisory group,” Ms. Misuraca said. “Due to an increase in cases involving asset misappropriation, financial statement misrepresentation, and securities and regulatory compliance violations, our focus at REM will be to provide clients with the analysis and support needed to achieve positive dispute resolutions, as well as advising clients on how to take preemptive steps to protect their assets.”

Under current law, portability allows the unused lifetime exemption of a deceased spouse to be transferred to a surviving spouse. In the instance when an estate tax return is required and timely filed, the portability election is fairly simple. In instances when a federal estate tax return is not required, the portability election can sometimes slip through the cracks.

The IRS recently released Revenue Procedure 2017-34, giving surviving spouses of estates additional time to file for portability after the death of their spouse. Previously, a surviving spouse had until the estate tax filing deadline plus extension to file for portability. That provided a window of only 15 months to elect portability (a 9-month due date plus a 6-month extension). This applied even to estates under the filing threshold of $5 million in 2011, increasing each year to the current $5.49 million. Those estates that had no estate tax filing requirement might easily have missed the deadline to file if the only reason for filing was to secure portability. The only option for a missed election in that narrow window of time was to request relief via a private letter ruling, which was a costly and time consuming option.

Under the new Revenue Procedure, surviving spouses may now file a late portability election up to January 2, 2018 for any death occurring after 2011. Also under the new rules, a surviving spouse has until the later of January 2, 2018 or two years after the death of the spouse to file for portability.

This new Revenue Procedure allows clients and practitioners another bite of the apple to correct any missed elections and to use the additional lifetime exemption granted under portability to create opportunities for estate planning or to enhance existing planning.

Forty-two homeless New York City youths are starting school this week with all-new backpacks and supplies, courtesy of Raich Ende Malter’s charitable/volunteer committee, REM-Co Cares.

Patrycja Leszczynski tries a backpack on for size.

REM-Co Cares received word about the “Project: Back to School” drive through an email from Coalition for the Homeless, a not-for-profit focused on providing food, clothing, shelter, and many other services to the homeless. While the deadline was closer than expected (less than two weeks until school started!), REM employees jumped on board and immediately began gathering supplies and donations. Suzanne Anderson and Joan Cardona of REM’s Broadway office asked Coalition for the Homeless to extend the deadline slightly, and not only were they happy to oblige, they volunteered to visit the Broadway office to pick up the supplies.

Amanda Rinaldo and Mike Meilak fill backpacks.

All three REM offices contributed to the effort, with employees purchasing supplies themselves or making monetary donations to help purchase supplies and backpacks in bulk. Even REM’s office suppliers, Weeks Lerman and Huntington Business Products Centre, donated some items after Managing Partner Ellis Ende suggested the idea. All supplies gathered in Long Island and New Jersey were shipped to New York City. On the day of collection, Joan began preparing backpacks, which were divided by grade level. Throughout the day, REM employees helped fill backpacks with school supplies, ranging from calculators to pencils and crayons to notebooks and binders. Ultimately, 42 were completed – 16 for early year students, 8 for elementary schoolers, 9 for middle schoolers, and 9 for high schoolers. In addition, REM stuffed another four boxes with extra school supplies.

For such a time crunch, REM did a fantastic job for a great cause. Sherry Conk, a bookkeeper in the Long Island office, especially enjoyed putting together supplies: “As a mother of two children, the youngest being a senior in high school, I miss going to the store and picking out school supplies like crayons and coloring books. This was a way to relive that and help out children who have trouble getting everything they need for a new school year.”

On September 5, Coalition for the Homeless picked up the completed backpacks and supply boxes from REM’s New York City office. The Coalition is distributing the backpacks and supplies this week to children in need in New York City.

Suzanne, Joan, and Sherry are on board to continue collecting school supplies for next year (hopefully on a less rushed schedule). Joan even plans to bake cookies to serve while employees stuff backpacks. Thank you to all who donated to Project: Back to School. You helped make a difficult time a little easier for these kids.

Raich Ende Malter & Co. LLP is pleased to announce our ranking among the top 100 accounting firms in America, according to INSIDE Public Accounting. The firm has maintained a strong presence on IPA lists for the better part of a decade.

The ranking is based on IPA's Survey and Analysis of Firms. Well over 500 accounting firms participate in this annual survey, providing in-depth financial and operational data to be compiled into the annual firm rankings released by IPA during August of every year. The IPA Top 100 is widely considered the gold standard for growth and profitability metrics within the accounting profession.

As always, our inclusion here is a source of pride, and we look forward to 2018.

On August 30, REM satisfied its sweet tooth at a firm-wide ice cream social. In our Long Island office, all of the staff members received an exclusive coupon promising one free cold treat. That afternoon, an ice cream truck (owned by Lenny Warner, a friend of tax partner Gigi Boudreaux) pulled up in front of the office building, and soon, a steady stream of REM employees lined up for delicious frozen indulgences. Coupons were exchanged for desserts, and shakes, cones, and sundaes were enjoyed by all. (Unfortunately, there were no sightings of anyone with a SpongeBob or Spider-Man Popsicle.) The weather proved perfect, and colleagues gathered in the sunshine.

In our New York City headquarters, ice cream made an appearance a different form. The NYC staff experienced a do-it-yourself sundae bar (à la Cold Stone Creamery), with a choice of three flavors: vanilla, chocolate, and coffee. To top it off, there was an abundance of toppings, including but not limited to sprinkles, cookies, M&Ms, and various syrups. After choosing toppings, an ice cream professional mixed everything together. Despite a nearing deadline for the tax department, nearly everyone made an appearance at the Social.

Thanks to the REM Social Events Committee for organizing the event. We raise our cones and salute you.

What's the longest road trip you've ever taken? A day? A week? Staff tax accountant Michelle Greco (Long Island) probably has you beat, having completed a two-month drive around the contiguous United States.

After graduating from college and passing her CPA exams, Michelle had six months to live it big before entering the accounting workforce. What to do? She and her college roommate wanted to take a journey together. After some deliberation, the two reached a final verdict – a two month road trip around the entire United States (complete with some special appearances in Canada). The two concocted a tight schedule accompanied by a detailed Excel spreadsheet (accountants...), they hit the road in Michelle’s leased Honda Civic.

From New York, they drove to Ohio, then to Louisiana, meeting up with several other college friends who came along for portions of the ride. In Texas, they ate barbecue and Michelle caught herself learning to line dance. (If you’re observant, you might catch her practicing in her cubicle.) Then, into the Southwest they went, stopping at the Grand Canyon in Arizona, as well as the Arches National Park and Zion Canyon in Utah. Zion was a fan favorite, with its deep valleys, rushing waterfalls, and lush foliage growing from the bright red sandstone cliffs.

Onward to California, where Michelle stopped in Hollywood and San Diego. She attended rooftop concerts, ate spectacular Korean barbecue, and even ran around the San Diego Zoo for free. The free zoo visit was in fact a 25-minute crash course through the park while Michelle and her friends were supposed to only be browsing the gift shop. Northern California presented Yosemite National Park, which was ...nice… according to Michelle. (Zion had set the bar rather high.) At the national parks, Michelle and her friends opted to stay at campsites rather than hotels – the college grads were on a tight budget. To keep with the trend, breakfast consisted of granola bars, and dinner was usually hot dogs cooked on a portable grill.

They drove up through Portland, Oregon to Seattle, where misfortune struck (literally). A truck crashed into her Civic, totaling the car. Everyone was okay except Michelle's insurance company. It took several heated conversations with the insurer, before Michelle managed to get back on the road -- with a new rental car and no liability for the destroyed Honda.

They traveled on to Glacier National Park and Yellowstone, where Michelle spotted hundreds of bison and glimpsed a pack of wolves on the hunt under the sunrise. In Chicago, she tried deep dish pizza, which was of course vastly inferior to a good ol’ New York slice. They wrapped up with a few days in Toronto and Montreal and then, after two jam-packed months, Michelle was back in New York and ready to take on the accounting world.

Michelle isn’t done. She’s vowed to go somewhere new every year, and has since visited Paris and the Canadian Rockies. Her next destination is Spain. Travel is a passion for her, and a necessity. As a high-octane accountant, Michelle feels it’s very important to “relax, go somewhere new, breathe, and enjoy the sunlight.”

Michelle feels it’s very important to “relax, go somewhere new, breathe, and enjoy the sunlight.” At the Horseshoe Bend on the Colorado River, in Arizona.

Shane Mason’s path from his hometown in Mississippi to the offices of REM was circuitous. And wet. Very wet.

Shane was born in Mississippi, where he attended college and got his CPA. He worked for PwC for three years in Austin, Texas before a family member fell ill, calling him back home to Mississippi. Craving adventure after too many days in a hospital, Shane decided to hit the road. This particular road took him to Europe, where he toured with a band in several western European countries, working the merch table and seeing the sights.

Shane's home for several weeks.

In 2013, Shane made a decision. He planned to return to the U.S., but he wanted to get back on his own terms—and cheaply. Using a website called Crew Seekers (kind of like Craigslist for sailors), Shane looked for work on a boat that would take him on as crew and ultimately land him home. He had little experience at sea (to be fair, few certified public accountants do), so the job search took a while. Around 70 applications later, Shane was finally offered a position on a crew crossing the Atlantic into Boston. Shane leaped at the opportunity and traveled to La Rochelle, France, where the crew was assembling at the sailing vessel, a catamaran.

The mission: deliver the catamaran to Boston in as little time as possible. On board were a British captain, a Welsh crewmember, the catamaran’s new owner… and Shane, the newbie deckhand.

The voyage got off to a rocky start. The catamaran’s rudders broke in the Bay of Biscay, forcing the crew to call the Spanish coast guard for help and dock for a temporary fix at Burela, a coastal town in Basque country. From there, they detoured to Lisbon for full repairs. These repairs took several days, and Shane and his crewmates were able to land and enjoy a week-long sardine festival in the Portuguese capital.

The crew relaxes ashore in Lisbon, Portugal. Shane is on the far right, in the festive purple garment.

After the rudders were restored to working order, they sailed to the Azores, an island chain off the coast of Portugal. There, the boat’s owner decided to abandon the journey and travel to Boston by plane. (He was not made to walk the gangplank.) Complicating matters further, the U.S. Embassy on the Azores was unexpectedly closed. This was a problem, because the Welsh crewman needed to obtain a visa before entering the United States. The captain had little choice but to alter course. Their new destination was Newfoundland, Canada, roughly a thousand miles northeast of Boston.

Video and still photos of the voyage.

The voyage from the Azores to Newfoundland took three weeks. Out at sea, Shane marveled at the sharks that circled around the boat when the water was still, watched for icebergs, and sailed north of the resting place of the Titanic. After dark, Shane witnessed the clearest night skies possible. Pods of dolphins stirred up bioluminescent plankton that lit up the nighttime sea. It was an experience like no other.

After delivering the Welshman to Canada, Shane and the captain were the only remaining members of the crew for the final leg south to Boston. The schedule was grueling—because someone had to be on watch around the clock, they worked in three-hour shifts, alternating between the wheel and the bunks.

In the end, Boston welcomed Shane. The boat’s owner hosted him upon arrival, and fed him a full lobster dinner. (Because what you really want after spending a month at sea is seafood, right?) Shane traveled on to visit friends in New York City, who convinced him to weigh anchor. Shane was offered a job as an accountant, and he ended up here at REM.

The sea still calls to Shane. He recently received his certification to buy a boat, and by next summer, he plans to hit the open waters again, this time on ocean vessel of his own.

An article by REM partner Elaine Fazzari appears in the most recent issue of New Jersey Business Magazine. Her article explains the benefits of using a combination of retirement plans, rather than a "one size fits all" approach. Companies may take advantage of significant tax savings while adding substantially to the owners' and employees' retirement funds.

The red carpet leads to REM’s NYC reception desk, where Wendy Strauss is a star. Wendy caught the acting bug when she was a teenager living in Tyler, Texas. A breakthrough role as Juliet at Tyler Junior College got the wheels turning, and before long, Wendy moved to New York to pursue acting seriously. At first, Wendy took roles in soap operas and commercials shot around the Big Apple. After meeting her husband, however, the couple changed gears and flew out to Los Angeles. Wendy picked up recurring roles on television staples such as "Days of Our Lives" and "Divorce Court." She even co-starred as Bunny in a direct-to-DVD film titled Bad Channels (Wendy claims that unfortunately, the movie’s quality is hinted at in its title).

After the birth of her son, Wendy moved back to New York, and with the help of her family, she opened the Homegrown Theatre in uptown Manhattan. The small venue sat 99 people and showcased student actors. Wendy acted, produced, and served as the company’s treasurer and secretary. During its life, the company produced the plays of Leonard Melfi, Clifford Odets, Sam Shepherd, Edward Allan Baker and many original pieces.

Unfortunately, Homegrown had to draw its final curtain when its landlord sold the building. Undeterred, Wendy continued to act in student films for Columbia University’s film department, and picked up a receptionist job for REM in our Broadway offices.

Recently, Wendy performed in an Off-Off Broadway play that may be in the works for a film. Though she doesn’t act quite as frequently, she spends her time writing (She had a story featured in Chicken Soup for the Soul!) and experimenting with photography. Her proudest recent role: founding an annual giving project called Mom’s Christmas Stocking, in which she helps fill over 200 Christmas stockings for women and children in need in New York City. Her website

So keep following the headlines. Wendy is still a member of the Screen Actors Guild and is a firm believer of keeping the dreams alive!

Class valedictorian. Ivy League graduate and Player of the Year. Pro basketball player in France and Finland. Proofreader extraordinaire. REM’s Melville office has its own former pro athlete—Alexander Barnett.

Born in St. Louis, Missouri, Alex was motivated (and badgered) by his older brother into the world of athletics. Though he started in baseball, Alex found himself craving more energy and excitement. In the fourth grade, he discovered what he needed: basketball. By middle school, Alex was playing basketball year-round. In high school, he was the only sophomore on the varsity team. Alex was on the Cardinal Ritter College Preparatory team all the way to the state championship and beyond, garnering the title and a 31-0 undefeated season.

Ivy League Player of the Year

Alex was also a gifted student and class valedictorian. He was recruited by numerous universities, but ultimately chose Dartmouth College. His college basketball career was remarkable, to say the least. Primarily a small forward, Alex played many positions, including shooting guard, power forward, and center. Alex is only the second Dartmouth player ever to win the title of Ivy League Player of the Year, a member of Wearer of the Green (Dartmouth’s Sports Hall of Fame), and one of the top ten highest scorers in Dartmouth history.

Seeking a professional career after Dartmouth, Alex found an agent and an opportunity in France. For several months, he played on Cholet’s Pro A team and later, on Nantes’ Pro B team. He then moved north to play half a season on a professional Finnish team. After the Finland season ended, Alex returned home and began work in mortgage consulting.

Since his professional days, Alex has played in a few summer basketball leagues, but all in all, he has moved on from the sport. He worked for mortgage consulting firms in Texas for several years. After having a child, Alex settled down in New York. He is now in REM’s Quality Control department, and is considering going back for his MBA.

If REM’s champion basketball team returns to the courts, we know who our first pick will be. But will he say yes? Probably not, because he’s a restricted free agent of the QC department in Melville. (Basketball fans will understand.)

At REM, we have our own guitar hero -- and he puts Peter Buck to shame.

Our firm shares its initials with an award-winning rock band. We're not associated with them*, but we do have a rock star of our own in our midst. What do you get when you mix over 15 guitars, 28 years of experience, and a mélange of musical styles, rhythms, and riffs? The answer here is our Director of IT, Lou Moran. It began with a fateful concert in which he saw KISS’s Ace Frehley shoot rockets out of a guitar. Lou was inspired to become a musician, too.

A younger Lou

Lou's played with many bands over the years. For a time in the mid-90s, he lived the rock star life, opening shows for major rock bands. He’s done studio work for local commercials, and has taken up several other instruments, including bass and drums (anything a band might need). He is no stranger to most genres of music, having played tunes from the Allman Brothers Band to Slayer to experimental jazz. His favorite songs to warm up on are Stevie Ray Vaughan’s "Pride and Joy" (for its complex syncopations), The Beatles' "Norwegian Wood" (challenging use of the pinky) and Metallica’s classic "Enter Sandman" (he says this one is just really fun to play).

Lou noodles in his home studio

These days, Lou plays at local bars, and is happy to perform whatever might come up. He has built up quite a collection of guitars, including several Les Pauls, some of which are currently on loan to friends and family. Otherwise, Lou enjoys “noodling” by the TV (playing guitar along with whatever plays out of the television) or jamming along with his son to Cage the Elephant or The Orwells. So keep your eyes and ears peeled if you go out at night—you might just catch Lou playing something sweet.

Have you ever biked across an entire state? Matt has.

Matt Bass, a tax manager in REM's New York City office, is a man of many hats. A graduate of Harvard Business School, Matt has taken on various roles, from radio and television producer to the head of his own operation as a business broker. By the time he became an accountant at REM & Co., Matt had garnered over 30 years of experience in the management world.

Business aside, Matt has some impressive hobbies. Many dare to take up running as a way to stay fit, but Matt has taken that not one, but two steps further. Starting in 2010, Matt has participated in several NYC triathlons—that’s 1 km of swimming, 40 km of biking, and finally 10 km of running to put the icing on the cake. In 2012, Matt completed the New York City Triathlon only one day after finishing the first section of his CPA exams. He’s a member of the New York Cycle Club.

This month, Matt plans to finish yet another NYC triathlon, and on July 23, he’ll participate in RAGBRAI, a week-long bike voyage across the state of Iowa—one of his favorites. We’re cheering you on, Matt!

Do you know of anyone at Raich Ende Malter who might be a good candidate for a staff spotlight? Let us know here.

Beginning January 1, 2018, all private employers will be required to participate in the New York State Paid Family Leave (NYS PFL) benefit law, which is meant to provide paid leave for employees in certain situations. NYS PFL goes beyond what is required under the Family and Medical Leave Act (FMLA) with regard to protections and payments, and thereby imposes new family leave obligations on New York employers.

NYS PFL will provide eligible employees (both full- and part-time) with up to eight weeks (and up to 12 weeks when fully implemented by 2020) of paid family leave annually to care for an infant (or newly-adopted or fostered child – including those born or placed for adoption prior to January 1, 2018), a family member with a serious health condition (including a spouse, domestic partner, child, parent, parent-in-law, grandparent, or grandchild), or to assist with family obligations when a family member is called to active duty. Note: NYS PFL is not available for prenatal conditions or an employee with serious health conditions.

Employers subject to NYS PFL

NYS PFL applies to all private employers with at least one employee in New York State. This includes out-of-state employers that have one or more employees working in New York (e.g., those working remotely). Public employers are generally exempt from NYS PFL.

Employees entitled to NYS PFL

Full-time employees who have been employed for at least 26 weeks are eligible, while part-time employees (defined as those scheduled to work fewer than 20 hours per week) must work at least 175 days to be eligible. Those requirements apply regardless of the number of hours per week actually worked and regardless of the employer’s size. Note: Both non-U.S. citizens and undocumented employees who otherwise meet eligibility requirements are eligible for NYS PFL. Employees working fewer than 26 weeks or 175 days in a consecutive 52-week period (e.g., short-term or seasonal employees) may file an NYS PFL waiver, in which case the NYS PFL payroll contribution deductions will be waived (as would the employer’s responsibility to provide benefits to that employee).

Funding

NYS PFL will be completely funded through employee payroll deductions.

Details

Covered employers are required to carry NYS PFL insurance or comply with the requirements to self-insure by January 1, 2018. We strongly recommend that you contact your NYS Disability Insurance carrier regarding adding an NYS FPL rider to your current disability policy as soon as possible.This policy should be effective by January 1, 2018.

The maximum employee contribution for coverage beginning January 1, 2018 will be 0.126% of an employee’s weekly wage up to and not to exceed the statewide average weekly rate, which is currently set at $1,305.92. For employees who earn more than $1,305.92 per week, the NYS PFL deduction will be capped at $1.65 per week ($1,305.92 x 0.126%). The deduction percentages and caps may change annually – the deduction percentage may change on January 1; the cap may change on July 1.

NYS PFL insurance coverage is designed to be funded through employee payroll deductions; however, employers may choose to cover the premium payments and not deduct contributions from employees. The number of weeks of leave available to eligible employees under the NYS PFL and the benefits paid will be phased in over several years. The phase-in schedule is:

This is a summary of the PFL. As of today, New York has not finalized the regulations regarding PFL. The final regulations are expected to be placed into effect within the next several weeks. As soon as we have additional information, we will forward it to you.

Raich Ende Malter & Co. LLP joined the "Future of Long Island CRE" summit as a corporate sponsor yesterday in Plainview, New York. The summit was hosted by New England Real Estate Journal, and covered topics as diverse as tax laws, environmental regulations, and an overview of current market trends.

Real estate is REM's largest practice area, with 50 dedicated professionals covering commercial and residential real estate properties, management companies, and owners. Learn more about what we're doing in this area here.

During the week of May 17, staff members in REM’s Broadway, Long Island, and New Jersey offices received life-saving training. Those who volunteered for the three-hour course were trained to perform adult, child, and infant CPR; to properly use an automatic external defibrillator (AED); and to dislodge obstructions in choking victims and perform resuscitation (if necessary) in adults, children, and infants. Volunteers are part of the firm’s First Responder Team and are expected to respond should an emergency situation arise.

“I’m personally very proud that so many of our staff members volunteer to join the First Responder Team,” says Barbara Weisbein, Director of Human Resources. “The program is partner-approved and staff-run. In addition to the life-saving techniques, the team is trained to take command, including crowd-control and post-EMT arrival. We plan and update our response protocols every year, and each member contributes to the discussion. A trained mind delivers a trained response.”

REM has offered the course to its employees since 2009. The firm absorbs the cost of the training and individual certifications (good for two years), as well as providing multiple AED devices and first aid kits in all REM locations.

Managing Partner Ellis Ende calls the training program a win-win. “I have to say, I have the greatest respect for our First Responders. Their level of compassion is amazing. And you can tell they’re doing it out of a sense of social responsibility, because so many of the same staff members stay on the team from cycle to cycle. We have wonderful people here.”

IT Manager Fred Brown is one of the firm’s original First Responders. He originally took the REM course in 2009. “It wasn’t the first CPR course I’d ever taken, but it was definitely more comprehensive than anything I’d learned before. One thing I like is that the material is always updated and expanded. We learn more every time.”

To date, the First Responder Team has never had to put its skills to use. Fred acknowledges that this is a good thing. “Obviously, it’s important information, and we should always be ready to act on it, but I’ve got to say, I’m glad it’s never happened here.”